The entertainment capital of the world is beginning to witness the tangible results of California’s aggressive legislative efforts to retain its signature industry, as film and television production in Los Angeles recorded a measurable uptick in the first quarter of 2026. According to the latest quarterly report released by FilmLA, the official permitting office for the City and County of Los Angeles, the region saw a 10 percent increase in total shoot days during the first three months of the year compared to the final quarter of 2025. While the data suggests a burgeoning recovery, the industry remains in a precarious state, struggling to return to the robust levels of production that defined the pre-pandemic and pre-strike eras.
The marginal growth observed at the start of 2026 follows a period of historic instability for Hollywood. Last year, production levels plummeted to a modern nadir, a result of the combined pressures of industry-wide labor disputes and a fundamental shift in the economic strategies of major media conglomerates. The current rebound is largely attributed to a surge in feature film activity, which logged a significant 52 percent year-over-year increase. Central to this growth is the newly expanded California Film and Television Tax Credit Program, which has begun to incentivize a fresh wave of domestic production. Nearly 25 percent of all feature filming in the region during the first quarter was driven by projects receiving state subsidies, signaling that the legislative pivot to bolster local production is starting to bear fruit.
Historical Context: From Peak TV to the Great Contraction
To understand the significance of the current production figures, it is necessary to examine the tumultuous period that preceded this modest recovery. Between 2021 and early 2023, the industry experienced the "Peak TV" era, characterized by massive capital expenditures from streaming services such as Netflix, Disney+, and Max as they vied for global subscriber dominance. However, by mid-2023, the "streaming wars" shifted from a focus on growth to a focus on profitability. This pivot led to significant belt-tightening across all major studios, resulting in cancelled projects and reduced development budgets.
This economic cooling was exacerbated by the historic dual strikes of 2023, involving the Writers Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA). The work stoppages, which lasted for several months, effectively froze production in Los Angeles and across the United States. Even after the strikes were resolved, the "restart" of the industry was slower than many analysts anticipated. Studios utilized the pause to re-evaluate their slate of content, leading to a leaner production landscape in 2024 and 2025. The 5,121 shoot days recorded in the first quarter of 2026, while an improvement over the previous quarter, remain nearly 30 percent below the five-year average, illustrating the long tail of the industry’s contraction.
The Impact of the California Film and Television Tax Credit Program
In response to the "runaway production" crisis—where projects flee California for states like Georgia or countries like the United Kingdom and Canada—California Governor Gavin Newsom and state legislators passed major revisions to the state’s tax credit program in 2023 and 2024. These revisions included making the tax credits refundable for the first time, a move designed to attract large-scale projects that might otherwise seek more lucrative financial incentives elsewhere.
The first quarter of 2026 represents the first reporting period where the impact of these changes is clearly visible on the streets of Los Angeles. Projects specifically selected under the revised incentive program accounted for nearly seven percent of all shoot days in the region. The impact is even more pronounced when broken down by category: incentivized projects made up 22 percent of all feature film production and 17 percent of all television production.
Several high-profile titles have been identified as key contributors to this local surge. Searchlight Pictures’ Behemoth!, Netflix’s One Attempt Remaining, and Amazon MGM Studios’ Nightwatching all utilized state tax credits to remain in California. Without these subsidies, industry analysts suggest these projects would likely have been filmed in international hubs, further draining the local economy of high-paying technical and creative jobs.
A Tale of Two Sectors: Features Rise While Television Falters
The FilmLA report highlights a stark divergence between the feature film sector and the television sector. Feature films have emerged as the primary engine of growth for the region, with 687 shoot days in the first quarter. This represents a more than 20 percent increase over the five-year average for the category. The resurgence of features is a welcome development for local labor unions and equipment rental houses, as large-scale film productions typically employ hundreds of workers and generate significant local spending.
In contrast, the television sector—long considered the stable anchor of the Los Angeles production economy—is facing a severe downturn. TV production recorded a 28 percent quarter-over-quarter decrease. More alarming is the fact that the 1,196 shoot days recorded for television are more than 60 percent below the five-year average. This decline is not limited to scripted drama and comedy; reality television, once a prolific source of shoot days in Southern California, saw a 52 percent drop compared to the final quarter of 2025.
Data from the research group Luminate provides further context for the television slump. According to their findings, unscripted content premieres in the United States have decreased by one-third since 2022. This contraction reflects a saturated market and a shift in viewer habits, as well as a strategic move by networks to produce reality content in lower-cost jurisdictions or international markets. The loss of television production is particularly damaging to the Los Angeles ecosystem because TV series provide long-term, stable employment compared to the more transient nature of feature film shoots.
The Competitive Global Landscape and Economic Headwinds
The struggle to maintain production levels in Los Angeles is inextricably linked to the global competition for media projects. Regions such as the United Kingdom, Ontario, and New Mexico offer aggressive tax incentives that often include credits for "above-the-line" talent—A-list actors, directors, and producers—which California’s program generally excludes. Furthermore, international markets often present significantly lower labor costs. In the U.K., for instance, studios are not required to contribute to the same level of private health insurance and pension funds that are mandated by union contracts in the United States.
These economic realities make Los Angeles an expensive place to film, despite its world-class infrastructure and deep pool of talent. The "tricky economics" of the region mean that even with state subsidies, many productions find it difficult to justify the cost of shooting in Hollywood. This has led to a decade-long slide in production volume that the current tax credit expansion is designed to arrest, though perhaps not fully reverse.
Official Responses and Industry Outlook
Despite the sobering statistics regarding television, local officials are expressing cautious optimism about the trajectory of the industry. Los Angeles Mayor Karen Bass, who has made the retention of the film industry a cornerstone of her economic agenda, signaled that the city is moving in the right direction.
"Hollywood is finally turning a corner with more productions and more jobs," Mayor Bass said in a statement following the release of the FilmLA report. "The expansion of the tax credit program is doing exactly what it was intended to do: keeping our cameras rolling and our crews working here at home. We will continue to work with the state and our industry partners to ensure that Los Angeles remains the creative capital of the world."
Denise Gutches, the CEO of FilmLA, echoed this sentiment while emphasizing the need for continued monitoring of the data. "While it’s still too early to make predictions for the coming months, the increase in shoot days we are seeing in key categories gives hope for a broader rise in production activity and points to the California Film and Television Tax Program’s growing impact on local job creation," Gutches stated.
Analysis of Implications for the Los Angeles Economy
The current production trends carry significant implications for the broader Los Angeles economy. The film and television industry is a primary driver of the region’s middle class, supporting not only actors and directors but also thousands of "below-the-line" workers, including carpenters, electricians, caterers, and drivers. A sustained 30 percent decline below historical norms represents a significant loss in household income and local tax revenue.
The shift toward feature films may provide a temporary boost, but the long-term health of the L.A. production scene depends on a recovery in the television sector. If the contraction in scripted and unscripted TV becomes permanent, Los Angeles may need to rethink its economic reliance on the entertainment industry or find new ways to lower the cost of production without compromising labor standards.
Furthermore, the success of the tax credit program will likely be a point of debate in the state legislature. While the 2026 data shows the program is working to attract features, the overall decline in shoot days compared to the five-year average may lead to calls for even more aggressive incentives or a broader restructuring of how the state supports the arts.
As the industry moves into the second quarter of 2026, all eyes will be on whether the momentum in feature films can be sustained and whether the television sector can find a new floor. For now, Hollywood remains in a state of transition—recovering from the shocks of the past three years but still searching for its footing in a rapidly evolving global media landscape. The road to a full recovery appears long, but for the first time in several years, the data suggests that the downward spiral may finally be leveling off.
